PRECIOUS-Gold down for day and month on U.S. fiscal worries

Sat Dec 1, 2012 2:26am IST

* Bullion also notches 2.3 pct weekly drop, biggest since
June
    * Stalemate on U.S. budget deal triggers recession fears
    * U.S. gold coins set for highest November sales since 1998
    * Coming up: U.S. Markit manufacturing, ISM data Monday

 (Adds market details, updates prices)
    By Frank Tang
    NEW YORK, Nov 30 (Reuters) - Gold fell almost 1 percent on
Friday and posted its second consecutive monthly decline on
investor worries that the U.S. fiscal crisis might lead to a
recession and on end-of-month profit-making which prompted a
flurry of sell orders.
    Bullion's drop accelerated after Speaker of the House John
Boehner said U.S. lawmakers from his Republican Party and
Democratic President Barack Obama are in a stalemate over a
budget deal needed to avoid a $600 billion "fiscal cliff" of
automatic tax hikes and spending cuts. 
    Some institutional investors lightened their gold holdings,
worried that failure to reach a budget deal could hurt economic
growth and undermine gold's appeal as an inflation hedge.
    "There is a significant amount of industry selling in
anticipation of higher taxes related to the fiscal cliff," said
Frank McGhee, head precious metals trader at Integrated
Brokerage Services LLC.
    "On the other hand, there is a fair amount of retail buying,
but in this case Wall Street tends to win," McGhee said.
    Spot gold was down 0.8 percent at $1,711.30 an ounce
by 3:15 p.m. EST (2015 GMT). It notched a 2.3 percent weekly
drop, which would be its biggest weekly decline since June.
    It also notched a 0.4 percent monthly loss for November,
after falling about 3 percent in October.
    U.S. COMEX gold futures for February delivery settled
down $16.80 at $1,712.70. February becomes the benchmark
contract after December's first-notice day on Friday.
    Trading volume was around 140,000 lots, about 25 percent
below its 250-day average, preliminary Reuters data showed.
Turnover was sharply lower after it hit a record high at 486,315
contracts on Wednesday, according to CME data.
    Silver fell 2.7 percent to $33.29 an ounce. 
    
    GOLD COIN SALES UP IN NOVEMBER
    In the retail sector, physical demand appeared strong.
    November sales of U.S. American Eagle gold coins are set to
be the strongest in 14 years as uncertainty surrounding the U.S.
fiscal crisis and the presidential election triggered safe-haven
buying, dealers said. 
    Holdings of SPDR Gold Trust GLD, the world's biggest
gold-backed exchange-traded fund, stood at a record high of
1,347 tonnes, up nearly 11 tonnes in its fourth consecutive
month of gains.
    Global gold demand in 2013 should be led by further strength
in Chinese demand and a recovery in India, helping the precious
metal continue its bull run into its 13th year, the
industry-backed World Gold Council said on Friday.
 
    Among platinum group metals, concerns about supply and
technical buying helped send palladium to a 2-1/2 month high of
$689 on Thursday.
    Norilsk Nickel, the world's largest producer of palladium
and nickel, expects the palladium market to remain in a deficit
for the next several years, largely due to a near depletion of
Russian state supplies. 
    Platinum fell 0.9 percent to $1,593.90, while
palladium dropped 0.7 percent to $677.22.
    
 3:15 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold FEB   1712.70 -16.80  -1.0  1710.20 1733.70  131,938
 US Silver MAR  33.279 -1.152  -3.3   33.215  34.425   49,331
 US Plat JAN   1604.60 -14.90  -0.9  1596.00 1622.20    7,382
 US Pall MAR    688.20   0.75   0.1   676.80  692.50    4,725
                                                               
 Gold          1711.30 -13.49  -0.8  1709.55 1731.50         
 Silver         33.290 -0.920  -2.7   33.180  34.340
 Platinum      1593.90 -14.59  -0.9  1598.50 1618.00
 Palladium      677.22  -4.50  -0.7   678.25  688.50
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        138,596   181,149   173,882      13.1    0.37
 US Silver       54,915    57,012    52,416     20.65   -0.54
 US Platinum      7,923     8,894     8,928     18.41    0.50
 US Palladium     4,936     5,756     4,720                  
                                                               
 
 (Additional reporting by Jan Harvey and David Brough)
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